Lanco in talks to sell office rental biz for Rs 1,000 crore

The 50-acre office zone, a part of the ambitious integrated township Lanco Hills, is still in the early stages of development with just over half a million sqft space leased currentlyBoby Kurian | TNN | July 31, 2017, 07:47 IST

BENGALURU: The debt-laden Lanco Group is holding advanced talks to sell its commercial office space business to southern builder DivyaSree Developers in a deal topping Rs 1,000 crore, or $160 million, people familiar with the matter said.

DivyaSree has emerged a strong contender to acquire Lanco Hills Technology Park, which has a planned development of 7.8 million sqft special economic zone and non-SEZ office spaces at Manikonda in Hyderabad. The group flagship Lanco Infratech, with Rs 43,000-crore debt, is among the 12 companies named by the RBI for action under the recently enacted Insolvency and Bankruptcy Code.

The 50-acre office zone, a part of the ambitious integrated township Lanco Hills, is still in the early stages of development with just over half a million sqft space leased currently. Apart from DivyaSree, K Raheja Corp and Canada’s Brookfield Asset Management have also explored a deal with Lanco Hills.

DivyaSree managing director Bhaskar Raju did not immediately respond to request for comments, when reached out by TOI. Repeated calls and text messages to Lanco executives remained unanswered.

“DivyaSree at this moment does not have any vacant space in its commercial portfolio and therefore is ready to pay a premium to meet client’s needs,” sources cited earlier added. DivyaSree has a leased portfolio of about 8 million sqft which includes tenants such as US bank Wells Fargo, fund manager Invesco and technology giant Google.

Lanco had launched the office zone claiming to make it the country’s tallest skyline and corporate hub. However, the group’s deteriorating debt profile and a morbid infra sector pushed back the real estate development plans significantly.

When fully built, Lanco Hills offices could accommodate 75,000 people with 12,000-car park facility. Hyderabad has become a new investment destination for office space developers at a time when the city’s real estate market is on a revival mode after almost half a decade of political turmoil.

Currently, the Goods and Services Tax (GST) is levied at 12 per cent on payments made for under-construction property or ready-to-move-in flats where completion certificate has not been issued at the time of sale.